Nifty below 8250, Sensex sheds 250 pts; oil, banks drag

International Energy Agency (IEA) has cut 2015 oil demand growth estimates by 2.3 lakh barrels oil per day (bpd) to 9 lakh bpd following sharp fall in crude oil prices. It is the fourth time cut in oil demand in last 5 months.

According to IEA, oil price rout will not hit production.

Brent crude hit a five-and-half-year low of USD 63 a barrel on a supply glut, down 1 percent compared to previous trading session and down 45 percent compared to USD 115 a barrel level in June.

Meanwhile, on December 10, Organization of the Petroleum Exporting Countries (OPEC) also had cut 2015 world oil demand growth forecast by 70,000 bpd to 1.12 million bpd.

Even it reduced forecast of 2015 demand for its crude by 280,000 bpd to 28.92 million bpd due to slower global demand and higher non-OPEC supply. However, it raised forecast for 2015 non-OPEC supply growth by 120,000 bpd to 1.36 million bpd.

OPEC said if current oil price fall continued over a longer period, that will impact non-OPEC supply in 2015.

Saudi Arabia told OPEC that it trimmed crude production in November by 80,000 bpd to 9.61 million bpd.

02:55pm Finance Minister says

Finance Minister Arun Jaitley says the government will introduce Goods & Services Tax bill in next session of parliament. “We will try to pass Insurance Amendment Bill next week. In fact, we are working overtime to push reforms in Insurance, Coal Bill,” he adds.

India needs series of reforms for economic growth. He expects economy to grow 6-6.5 percent next fiscal (FY16).

02:45pm Market Check

Equity benchmarks slid further with the Sensex shedding 242.30 points to 27359.71 and the Nifty falling 64.45 points to 8228.45 due to profit booking in oil & gas, capital goods, metals, financials and auto stocks.

About 931 shares have advanced, 1878 shares declined, and 102 shares are unchanged.

02:35pm Pharma drugs

India has capped the prices of 52 more drugs, including painkillers and antibiotics, the pricing authority said in a notice.

The additional drugs join a list of nearly 400 essential medicines that have so far been placed under price control in India, where a majority of the people live on under USD 2 a day and health insurance is scarce.

The new drugs to come under price control include commonly-used antibiotics and painkillers as well as medicines used for treating cancer and skin disorders, a notice on the National Pharmaceutical Pricing Authority (NPPA) website said, reports Reuters.

02:25pm Watch out for CPI data

Kotak Mahindra Bank expects November CPI in the range of 4.2-4.3 percent as the “core hasn’t changed much in the downside” and October IIP at 1.5 percent. Both numbers will be announced later in the day today.

Inflation based on consumer price index (CPI) for November is expected to soften further led by favorable base. A CNBC-TV18 poll of analysts estimates the inflation to come in at 4.4 percent as against 5.5 percent on a month-on-month basis.

According to estimates, on a sectoral basis the biggest decline will be led by food, beverage and tobacco inflation, which constitute 50 percent of CPI. Even fuel inflation is expected to continue softening.

Meanwhile, the index for industrial output (IIP) for the month of October is seen at 2.1 percent against 2.5 percent on a month-on-month basis.

In an interview to CNBC-TV18, Indranil Pan, Chief Economist at Kotak Mahindra Bank, said he sees a rate cut from RBI in Q1CY15 and expects rupee to touch 63 against dollar by March-end.

Raamdeo Agarwal of Motilal Oswal says the Indian markets have risen 100 times in the last 30 years and there is nothing stopping India from seeing exponential growth in the next 25 years. He advises holding onto quality names as quality and growth together will lead to exponential gains.

Global markets are a mixed bag today. European markets like CAC and DAX fell more than 1 percent while in the commodity space, Brent crude hit a five-and-half-year low of USD 63 a barrel on a supply glut. The sentiment was dampened in Asia after Chinese industrial output hit 3-month low of 7.2 percent.

Meanwhile, the government sources indicated most issues with regard to Goods and Service Tax (GST) is likely to be resolved within a week. Expectations are that GST Constitutional Amedment Bill could be tabled in the winter session of the parliament.